Natfoods volume growth slows in Q3
BUSINESS REPORTER
Consumer staples concern, National Foods Holdings Limited (Natfoods) says its volume momentum slowed in the third quarter ended March 31 due to an expected decline in maize offtake following a good 2021/2022 harvest.
Volume for the period increased by 3% relative to the prior year. This compared to year on year volume growth of 24% achieved in quarter 1 and 8% achieved in quarter 2, company secretary Leigh Howes said in a trading update.
“Excluding maize, volumes increased by 9% compared to last year. On a cumulative year to date basis, volumes are 11% ahead of prior year, driven by stockfeeds, rice, salt and snacks,” Howes said.
The executive said while consumer demand remains solid, it has been impacted by a resurgence in inflation.
Howes said the current agricultural season has been impacted by erratic rainfall patterns, and it is likely that imports of maize and soya will be needed before the 2022-2023 harvest.
“This is disappointing given that the initial weather forecasts and production estimates had looked encouraging,” the executive said.
Howes said the war in Ukraine has caused a surge in global commodity prices, with the jump in wheat and fertiliser prices which will impact Natfoods.
“These increases will see inflationary pressure in US$ terms in many of the categories we participate in during the coming periods, and especially the flour to bread value chain,” she said.
The consumer staples concern is however optimistic on the trajectory of the local economy despite the recent headwinds driven by local inflation and the situation in Ukraine.
“Our team continues to investigate the feasibility of additional complimentary categories which will broaden our portfolio of products,” Howes said.
She said the Harare Cereal and Bulawayo Flour mill projects continue to make steady progress and are expected to be commissioned mid-2022 and early 2023 respectively.
